Need help - first year of doing taxes under TTS with MTM.

[mdeodhar]

2022 is going to be my first tax reporting year with TTS and MTM accounting. Therefore I need some guidance from the members who may be experienced in this with using Turbotax. No need to start from basics because I already have collected some notes such as... need to use the forms option from CD or download version, Have to go thru Q&A to setup the correct options, have to print the return and file etc. 

I have few below questions...

1. Does the CD version have same trade transaction volume limits as the download version for TT Home and Business? 

2. After answering the questions on the initial interview and then importing the trade entries from the broker account, was turbotax able to correctly prepare the form 4797?

3. Was there any manual corrections/adjustments needed because turbotax was not accurate?

Please share any other tricks and tips that may be valuable.

Many thanks. 

[Anonymous_]

You might want to read through the following post in the interim.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/income/report-trader-activity-without-se...

[mdeodhar]

Thanks. I have another question. Where can I report the statements 1099-B, 1099-INT that are related to the my trading account? I am guessing that should also go under the business income section and not under my person income section?

Thanks

[Cynthiad66]

Since this is Market to Market, everything will be posted on Schedule C. Use the link below for steps on reporting income or transactions.

How to Report Sales Using the MTM Election

Making the Sec. 475(f) election offers at least one monumental advantage. Sec. 475(d)(3) provides that the gains and losses recognized on the deemed sales are treated as ordinary income or ordinary losses. This rule is extremely valuable because it allows traders (who make the election) to avoid the limitation on the deduction of capital losses. By making the election, traders can use losses to offset all other taxable income without limitation. Moreover, because these are business losses, traders can add to or create a net operating loss that they can carry back two years and forward 20 years. The wash sales rules do not apply.

Use the link below for additional information about the election. 

Election of Mark to Market for Traders in Securities or Commodities

This Exhibit below is useful in determining status.

Exhibit : Tax treatments of traders, investors, and dealers

	Investor	Trader	Trader	Dealer
Income		No mark-to-market election	Mark-to-market election
Capital gain treatment	Yes	Yes	No (ordinary income)	No
Capital loss limits	Yes	Yes	No (ordinary income)	No
Reporting	Schedule D	Schedule D	Form 4797	Form 4797
Wash sale rules	Yes	Yes	No	No
Dividends and Interest	Schedule B	Schedule C	Schedule C	Schedule C
Deductions
Authority	Sec. 212	Sec. 162	Sec. 162	Sec. 162
Type	Investment	Business	Business	Business
Reporting	Schedule A	Schedule C	Schedule C	Schedule C
Sec. 67 misc. itemized	Yes	No	No	No
Sec. 68 phaseout	Yes	No	No	No
Sec. 179 expensing	No	Yes	Yes	Yes
Home office	No	Yes	Yes	Yes
Investment interest	Yes	No	No	No
AMT expense limitations	Yes	No	No	No
SE tax	No	No	No	No
Qualified retirement plan	No	Yes	Yes	Yes
Health insurance premiums	No	Yes	Yes	Yes

@mdeodhar

@mdeodhar

{Edited 3/6/2023 |12:46 PM PST}

[Anonymous_]

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@mdeodhar wrote:

Where can I report the statements 1099-B, 1099-INT that are related to the my trading account? I am guessing that should also go under the business income section and not under my person income section?

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Yes, the income from dividends and interest would be reported as business income (Schedule C, presumably) if you have made a MTM election, but the trades would initially be reported on Form 4797.